German DAX May Stick to Tight Trading Range
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German DAX– Retail traders have once again turned net-long the GER30, which tracks the German DAX, and a contrarian view of crowd sentiment points to further DAX declines. This stands in notable contrast with just last week when the opposite was true—our indicator pointed to DAX strength.
Suffice it to say, choppy and range-bound price action makes it difficult to stick with a lasting trading bias. And indeed our data suggests that retail traders may outperform in low-volatility markets. Current retail sentiment suggests German stocks will continue lower, but we would need a notable shift in market conditions to call for meaningful price breakdown.
See next currency section: S&P - S&P 500 in a Precarious Position – What to Watch
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.